@Avon B7 and @Gatorguy... Do you think that the methods Apple was allowed to use in determining profit allocation (for the Irish branches) was unreasonable? And if so, why?
This question is not about Ireland's general (prior) tax policy of making profits not attributable to an Irish branch not taxable in Ireland, nor about the (perceived to be) unreasonable results which could result from that tax policy oddity.
(I'm assuming, since the issue of the Irish tax situation was raised in this thread and conversation about it was allowed to continue, that it's okay to discuss it in this thread. I intentionally waited a period of time before responding to that issue to give moderators a chance to decide that it shouldn't be discussed here.)
I don't have any solid opinion about whether I believe the initial agreement Apple made with Ireland was "reasonable". It was long time ago, almost forty years now, in a different economy and involving a far smaller Apple that was looking for ways to survive and grow.
The only part I have a firm opinion about is it being unreasonable for Apple (or any highly profitable multinational) to use any and all means, from shifting IP including trademarks to other countries to claim licensing costs between owned subsidiaries as a deduction, moving sales out of the country of origin to a totally unrelated one in order to register no profits in countries that tax it. When irregularities get revealed in the light of day surreptitiously moving to a new tax haven (Jersey) instead of changing their ways, and including methods which skirt the edge of tax evasion (which of note was claimed by the Japanese), believing as a company value they be allowed to ignore entirely the tax obligations the little guys pay must pay, creatively avoiding corporate taxes whatsoever on the majority of their profits.
For the richest and most profitable company on the planet with a professed dedication to tax fairness ("We follow not only the letter of the law but the spirit") and more assets removed from the money velocity equation than any company has ever done I find their actions to be an unreasonable disconnect from their public stance, and "changing the world" in some ways that do not make it better.
That first link looks to provide enough evidence to keep Huawei out of any commerce at all in the U.S.
From that first link:
"Huawei has denied the charges"
From that first link:
"Khan was more surprised when the U.S. Federal Bureau of Investigation drafted him and Akhan’s chief operations officer, Carl Shurboff, as participants in its investigation of Huawei"
In another news piece (supplied by Bloomberg, no less) it was Akhan himself that contacted the authorities.
It was Akhan himself that agreed to send Huawei the sample knowing full well all the accusations surrounding Huawei. Strange.
He was surprised it got destroyed? Why? It had to be tested which necessarily would mean taking the sample to breaking point. Strange.
Bloomberg speaks of a 'sting' but other reports claim the FBI didn't get anything from the tapped conversations. Strange.
It seems a little like Keystone Cops at this point.
Now back to Apple's tax problems.
There was a second article that I posted that you’re completely ignoring.
Not ignoring. I mentioned it further up. I just didn't want to take things too far off topic with a blatant ploy of whataboutism by Tmay.
The T-Mobile case was closed. It went through the courts and the jury found Huawei's actions to be neither willful nor malicious. Of the 500 million dollars that T-Mobile sought, only $4.75m was awarded and I'm not sure that it was ever paid. There might have been some private agreement. My memory of this is fading but it shows how little the US actually has if they have to go digging for this kind of stuff.
I find it difficult to believe that the T-Mobile case mentioned in the article has been closed, considering that the indictment wasn't actually presented to the court until three weeks ago (the article is from January 29th).
Maybe you should try reading the article presented before discounting it.
What you describe sounds more like a civil lawsuit than a (pair of) criminal investigation(s).
I am not discounting it, simply stating that the same accusations as now presented in the indictment have already been through the courts and a verdict was reached. That verdict is what it was and I took a key conclusion from it.
The recent indictment paints a picture of systematic abuse in the actions of Huawei but fails to present much to justify it. To the point of picking up on the robot case. In so many years, and having been under such scrutiny from all sides and at all levels, you would be forgiven for thinking that the US government could produce a sackload of bulletproof cases brimming with evidence.
The reality seems to be that the so called threat of Huawei on the national security level (The real accusation of the US) isn't really backed up by much at all. The opposite could in fact be true as Huawei has already pointed out to the UK parliament. After dealings with thousands of companies and managing huge swathes of the planet's communications and being scrutinised like no other ICT company on earth, Huawei has not suffered national security issues, much less been shown to participate in anything untoward. As it points out very clearly, any such involvement would mean the destruction of the company.
It is also worth noting a direct parallel with Apple and the Irish case and Huawei. At the time Apple began its tenure on Irish soil, we openly accept that the Apple of then was very different to the Apple of now. The Huawei of a few years ago is different in many ways to the Huawei of today.
@Avon B7 and @Gatorguy... Do you think that the methods Apple was allowed to use in determining profit allocation (for the Irish branches) was unreasonable? And if so, why?
This question is not about Ireland's general (prior) tax policy of making profits not attributable to an Irish branch not taxable in Ireland, nor about the (perceived to be) unreasonable results which could result from that tax policy oddity.
(I'm assuming, since the issue of the Irish tax situation was raised in this thread and conversation about it was allowed to continue, that it's okay to discuss it in this thread. I intentionally waited a period of time before responding to that issue to give moderators a chance to decide that it shouldn't be discussed here.)
I have always stated that the technical issues should be resolved by specialists in the different fields and accepted that we must wait for the case to be heard. Simply because the issues at hand are complex. This particular case required a three year investigation and we only have a summary.
That said, the summary of the investigation reveals situations that do not sit well with the majority of casual observers. I don't think it is a case of deciding if what was allowed was reasonable or not but if what Apple (and others) did with it was reasonable or not. That falls into a personal, subjective arena.
What gets under my skin (and I"m sure I'm not alone) is seeing a CEO using 'values' as a supporting line of defence in the public realm.
My biggest complaint is there but it is personal.
It is not a question of 'picking numbers out of thin air'. It is a question of saying, which instruments can we use to determine how much we will make available for taxation. That allows for the company, given its size, to effectively decide for itself what the figure will be (all 'legal' - until determined not legal).
That is where the investigation will put facts on the table and we will eventually be able to see what those 'values' equate to and if the spirit of the law has been followed or not.
Comments
The only part I have a firm opinion about is it being unreasonable for Apple (or any highly profitable multinational) to use any and all means, from shifting IP including trademarks to other countries to claim licensing costs between owned subsidiaries as a deduction, moving sales out of the country of origin to a totally unrelated one in order to register no profits in countries that tax it. When irregularities get revealed in the light of day surreptitiously moving to a new tax haven (Jersey) instead of changing their ways, and including methods which skirt the edge of tax evasion (which of note was claimed by the Japanese), believing as a company value they be allowed to ignore entirely the tax obligations the little guys pay must pay, creatively avoiding corporate taxes whatsoever on the majority of their profits.
For the richest and most profitable company on the planet with a professed dedication to tax fairness ("We follow not only the letter of the law but the spirit") and more assets removed from the money velocity equation than any company has ever done I find their actions to be an unreasonable disconnect from their public stance, and "changing the world" in some ways that do not make it better.
The recent indictment paints a picture of systematic abuse in the actions of Huawei but fails to present much to justify it. To the point of picking up on the robot case. In so many years, and having been under such scrutiny from all sides and at all levels, you would be forgiven for thinking that the US government could produce a sackload of bulletproof cases brimming with evidence.
The reality seems to be that the so called threat of Huawei on the national security level (The real accusation of the US) isn't really backed up by much at all. The opposite could in fact be true as Huawei has already pointed out to the UK parliament. After dealings with thousands of companies and managing huge swathes of the planet's communications and being scrutinised like no other ICT company on earth, Huawei has not suffered national security issues, much less been shown to participate in anything untoward. As it points out very clearly, any such involvement would mean the destruction of the company.
It is also worth noting a direct parallel with Apple and the Irish case and Huawei. At the time Apple began its tenure on Irish soil, we openly accept that the Apple of then was very different to the Apple of now. The Huawei of a few years ago is different in many ways to the Huawei of today.
That said, the summary of the investigation reveals situations that do not sit well with the majority of casual observers. I don't think it is a case of deciding if what was allowed was reasonable or not but if what Apple (and others) did with it was reasonable or not. That falls into a personal, subjective arena.
What gets under my skin (and I"m sure I'm not alone) is seeing a CEO using 'values' as a supporting line of defence in the public realm.
My biggest complaint is there but it is personal.
It is not a question of 'picking numbers out of thin air'. It is a question of saying, which instruments can we use to determine how much we will make available for taxation. That allows for the company, given its size, to effectively decide for itself what the figure will be (all 'legal' - until determined not legal).
That is where the investigation will put facts on the table and we will eventually be able to see what those 'values' equate to and if the spirit of the law has been followed or not.